JSW Steel denies violation of Sec 29A in Monnet deal

Seshagiri Rao, joint managing director and group CFO, JSW Steel, said that the reasons why ArcelorMittal was declared ineligible in the case of Essar Steel have no resemblance to the allegations being made in the case of JSW Steel.

JSW Steel said on Thursday that the allegations that it being declared the successful bidder in the case of Monnet Ispat & Energy flouted Section 29A of the Insolvency and Bankruptcy Code, (IBC) are incorrect.

JSW Steel said on Thursday that the allegations that it being declared the successful bidder in the case of Monnet Ispat & Energy flouted Section 29A of the Insolvency and Bankruptcy Code, (IBC) are incorrect. Seshagiri Rao, joint managing director and group CFO, JSW Steel, said that the reasons why ArcelorMittal was declared ineligible in the case of Essar Steel have no resemblance to the allegations being made in the case of JSW Steel. “ArcelorMittal is directly a promoter in Uttam Galva, here we are referring to connected persons. There is a fundamental difference,” Rao said. The fact that Seema Jajodia, sister of Sajjan Jindal, was reflected as a promoter of Monnet Ispat & Energy until September 2017 was presented by the employees of Bhushan Steel to the National Company Law Tribunal (NCLT) in their arguments seeking ineligibility of JSW Steel in bidding for Bhushan Steel. They argued that since Jindal (promoter of JSW Steel) was connected through Jajodia to Monnet undergoing insolvency proceedings, it be declared ineligible.

The comments come a day after a tweet from the Twitter handle of ArcelorMittal India tagging Sajjan Jindal, chairman, JSW Group, which read: “@sajjanjindal Interesting what decision is being taken on Monnet today given it’s clear JSW runs afoul of 29A as they are related to the existing promoter….who is making the mockery here?” JSW Steel and ArcelorMittal locked horns earlier this month to bid for Essar Steel, with the former partnering with another bidder Numetal for the debt-ridden company. This was after JSW Steel was not allowed to bid for Essar Steel by the lenders in the second round of bidding, saying it did not participate in the EOI stage of the first round.

However, Rao said that JSW Steel was not considered ineligible to bid for either Bhushan Steel or for Monnet. “All these facts were known to the resolution professionals and were debated in the public domain as well, and RPs have declared JSW Steel an eligible bidder in both the cases after due consideration”. He added that these issues cropped up even earlier when the process started and the company had clarified at that time as well that it was not affected with the connected persons issue. “There is no default with regards to the connected persons. We are not affected by that. JSW Steel is in no way involved with Monnet”.